Only 15% of Video Downloads are Legal, According to Study

Furthering the sentiment of the slow uptake of VOD for American consumers, a recent study suggests that only 15% of the video content downloaded is legally purchased. Among some of the “solutions” are more versatile forms of DRM and the often cited notion of watermarking content. The dirt:

The majority of those films are likely downloaded and shared through peer-to-peer online sites by a small subset of broadband households. But rather than go after those households with lawsuits, treat them as criminals or lobby legislators for more copyright protection, In-Stat said studios could instead convert them into legal purchasers by making it easier for them and other consumers to watch movies when and where they want.

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He predicts that as consumers become more used to watching content when they want it, more people will fall into the group of heavy users that do use P2P networks to watch shows when they can’t find them legally.

“These represent the next generation of consumers,” Nissen said. “Content holders should be watching these people. If you set up strategies for monetizing online video or video in general, and you satisfy this group, then you’re setting yourself up for long-term success.”

By converting illegal viewers into paying customers, Nissen projects that content holders could generate $1.4 billion in subscription revenue and $1.1 billion in advertising revenue.

Nissen said simply making movies available on Netflix’s streaming service would make it appealing enough for most P2P users, many of whom are already Netflix subscribers, to just watch there rather than use illegal file-sharing networks to get downloads.

But beyond that, the way to satisfy P2P downloaders, Nissen said, is to include watermarks on downloads that note who owns the download and what rights they have. Nissen said the technology is already available to use DRM to let users pay different amounts depending on what they want to do—studios, for example, could charge one price for a simple rental as they do now, more for a permanent download, more if a user wants to watch that download on a TV or mobile device and more if they want to use a clip from a TV show to make a mash-up video for YouTube.

Full report over at VidBiz.